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April 24, 2026
Cadwalader Tax Group Chair Linda Swartz was featured in the Law360 article, “Spinoff Landscape Unclear in Wake Of Tossed IRS Guidance” which explores the IRS’s abandonment of its controversial January 2025 spinoff guidance, leaving the tax-free spinoff landscape uncertain.
The decision to withdraw the guidance was welcomed by tax attorneys, but there remains a lack of clarity in the current private letter ruling (PLR) environment. The IRS released guidance for requesting PLRs for spinoffs in 2017 and 2018, which indicated a willingness to liberalize the administrative standards that were set forth in those revenue procedures.
Subsequent guidance in 2024 overturned that framework, indicating that the agency would no longer issue private‑letter rulings for certain reorganizations — particularly those in which a parent company seeks flexibility while retaining some of the shares of its spun‑off subsidiary. The IRS subsequently incorporated that guidance into the spinoff proposal it introduced in 2025, which has since been shelved.
In assessing the situation Linda noted that the 2017/2018 guidance is "clearly better than what we had in the immediate past," and under that guidance, taxpayers understood how to frame their ruling requests to address issues that weren't in the guidance.
Linda remarked that it is now “a bit of a catch-22” for tax attorneys, as taxpayers won’t be incentivized to seek private‑letter rulings while the IRS’s ruling practice remains unclear. Read the full article (subscription required).
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